Korea’s early trade data indicate patchy exports recovery

Growth in South Korean exports moderated at the start of the year, suggesting any recovery in global trade this year could be bumpy.

The value of shipments adjusted for working-day differences increased 2.2% from a year earlier in the first 20 days of January, according to data released Monday by the trade ministry. Headline exports fell 1%. Overall imports declined by 18.2%, resulting in a trade shortfall of $2.6 billion.

The daily average growth for the first 20 days compares with the full-month daily average growth of about 14% in December.

South Korea’s exports emerged from a year-long slump late last year, led by a pickup in memory-chip prices and demand for products including petrochemicals and displays. Chip exports rose about 20% in the latest period.

Should that trend hold, South Korea’s exports will probably rise by 7.9% in 2024 while imports increase 3.3%, according to forecasts by the Korea International Trade Association.

South Korea is a major player in international commerce, and the role its industries play in worldwide supply chains makes its trade data a leading indicator for global consumer demand. Monday’s data offer signs of a slow recovery after a prolonged period during which higher interest rates weighed on sentiment.

Automobiles shipped 2.6% more compared with the same period last year, the customs office said. Shipments of steel products fell 7.4% while wireless communications devices sold 24.2% less. Exports of ships jumped 89.8%.

The US overtook China last month as South Korea’s largest export destination, indicating a potential shift in economic ties as political tensions between Washington and Beijing reshape global trade.

For the first 20 days of January, China regained its position as the biggest buyer of South Korean goods, accounting for 20.4%. The US took 18.6%, the second most, the customs office said.

Economic woes in China are among headwinds affecting South Korea’s trade. A raft of major elections across the world will contribute to geopolitical uncertainties for commerce as well.

Exports to China edged up 0.1% from a year earlier, customs data showed. Shipments to the US increased 3.6% and those to Taiwan jumped 21.4%. Exports to the European Union dropped 9.4% while those to Japan fell 4.1%.